It took them awhile
For most of today the dollar seemed immune to the broad breakouts in Treasury yields. US 10-year yields broke the January high of 1.20% and 30s rose above 2.0%.
There was no reaction in early trade but as New York ramps up, it’s leading to a wave of US dollar buying. AUD/USD is down 50 pips from the highs of the day and it’s been a straight line move in the past hour.
That’s typical of some of the moves elsewhere.
The thinking is increasingly that the US is coming out of the pandemic faster than everyone else and will be forced to hike earlier. We get some Fedspeak today but so far it has been vanilla, with Bullard on CNBC saying inflation was under control.
The rise in the dollar and yields so far hasn’t spilled over to equities. S&P 500 futures are up 14 points. That could be the next shoe to drop.
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